TRAINING DEPT.

GUIDE TO THE GLOBAL COMPACT:

A Practical Understanding of the Vision and Nine Principles
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1. The Origins and Vision of the Global Compact

Topics –
 key issues and concerns that have stimulated the Global
Compact
 objectives and development of the initiative
 approaches available to companies seeking to engage
with the Global Compact

United Nations Secretary-General Kofi Annan first proposed the Global Compact in an
address to The World Economic Forum on 31 January 1999. Amid a backdrop of rising
concerns about the effects of globalization, the Secretary-General called on business
leaders to join an international initiative – the Global Compact – that would bring
companies together with UN agencies, labour, non-governmental organizations and
other civil-society actors to foster action and partnerships in the pursuit of a challenging
vision: a more sustainable and inclusive global economy.
The Secretary-General understood that while corporate citizenship – also referred to as
“corporate responsibility”, “sustainable growth”, and the “triple bottom line”, among
other terms – was emerging as a business trend, there existed no international
framework to assist companies in the development and promotion of global, values-
based management. By rooting the Global Compact in internationally accepted
principles, participants could feel confident that their actions were being guided by
values that are universally supported and endorsed.
The Global Compact’s operational phase was launched at a high-level event at UN
Headquarters in New York on 26 July 2000. The meeting, chaired by the Secretary-
General, brought together senior executives from some 50 major corporations and the
leaders of labour, human rights, environment and development organizations.
Since the launch, hundreds of companies and organizations have engaged in the
Global Compact. The private-sector participants represent virtually all industry sectors
on every continent.
The Global Compact is a voluntary corporate citizenship initiative. As such, the Global
Compact is not a regulatory instrument – it does not “police” or enforce the behavior or
actions of companies. Rather, the Global Compact relies on the enlightened self-
interest of companies, labour and civil society to initiate and share substantive action in
pursuing the principles upon which the Global Compact is based.
The Global Compact seeks to provide a contextual framework to encourage innovation,
creative solutions, and good practices among participants. The Global Compact is not
a substitute for regulatory structures or other codes. Indeed, the Global Compact
believes that voluntary initiatives and regulatory systems complement each other and,
when combined, provide powerful impetus in encouraging the wide adoption of
responsible corporate citizenship.
The emphasis has been to bring about corporate change through the use of a learning
approach that facilitates discussion between the various groups and builds new
relationships for future projects. In adopting such an approach, rather than a classical
regulatory approach, the Global Compact has gone into “uncharted territory”, and this
has invited some criticism from those who would like it to have sharper teeth in the
form of monitoring and verification. However, as stated, these are not areas within the
mandate of the Global Compact.

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The Global Compact is based on nine principles in the areas of human rights, labour,
and the environment. These principles are derived from universal consensus based on
the following:
 The Universal Declaration of Human Rights
 The International Labour Organization’s Declaration on Fundamental
Principles and Rights at Work
 The Rio Declaration on Environment and Development

2. Introduction to the Nine Principles

The objective of the Global Compact is to encourage an alignment of corporate policies
and practices with universally agreed and internationally applicable values and goals.
These core values have been distilled into nine key principles in the areas of human
rights, labour and the environment as shown in the box below and, more formally, on the
following page.
The Secretary-General underscored the The nine Global Compact Principles are:
role of business both in encouraging the
 To support and respect the protection of
ongoing support of multilateral institutions, internationally proclaimed human rights
and significantly, in taking direct actions
that seek to realise these values within the  To avoid complicity in human rights abuses
corporate sphere. To assist business in  To uphold freedom of association and the
this endeavour, Kofi Annan offered the effective recognition of the right to collective
bargaining
support of three UN agencies – the Office
of the High Commissioner for Human  To eliminate all forms of forced and
Rights, the International Labour compulsory labour
Organisation and the United Nations  To abolish effectively child labour
Environment Programme. Other UN  To eliminate discrimination with respect to
agencies are now participating actively in employment and occupation
the Global Compact, notably the United
 To support a precautionary approach to
Nations Development Programme environmental challenges
(UNDP).
 To promote greater environmental
The three areas of human rights, labour responsibility, and
rights and the environment were chosen as  To encourage the development and
those where business has a real potential diffusion of environmentally friendly
to influence and bring about positive technologies.
change. In addition, these fields
are supported by the following three international agreements:
2.1 The Universal Declaration of Human Rights
2.2 The International Labour Organisation’s Declaration on Fundamental Principles
and Rights at Work
2.3 The Rio Declaration of the United Nations Conference on Environment and
Development
In the following sections we shall go through these three areas and describe the nine
principles underlying the Global Compact. Our focus will be on providing a basic
understanding of what the principles represent and how they relate to the business sector
– whether it be a multinational corporation or a SME (small-and-medium enterprise), and
whether the company operates in an industrialised or industrialising country.

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The Global Compact’s Nine Principles

Human Rights

Business is asked to:

1. Support and respect the protection of international human rights

within their sphere of influence; and
2. Make sure their own corporations are not complicit in human rights
abuses.

Labour

Business is asked to uphold:

3. Freedom of association and the effective recognition of the right to

collective bargaining;
4. The elimination of all forms of forced and compulsory labour;
5. The effective abolition of child labour; and
6. The elimination of discrimination in respect of employment and
occupation.

Environment

Business is asked to:

7. Support a precautionary approach to environmental challenges;

8. Undertake initiatives to promote greater environmental responsibility;
and
9. Encourage the development and diffusion of environmentally friendly
technologies.

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3. An Introduction to Human Rights

Topics –
 the basic concept of human rights
 key aspects of the Universal Declaration of Human Rights
 some of the contemporary issues that have increased the
importance of human rights for business
 possible actions that businesses can take to address complicity
 possible ways that companies can address human rights issues
in their sphere of influence

The origin of Principles One and Two, relating to human rights, is to be found in the
Universal Declaration of Human Rights (UDHR) of 1948. The aim of this declaration is
to set basic minimum international standards for the protection of the rights and freedoms
of the individual.
The fundamental nature of these provisions means that they are now widely regarded as
forming the foundation of international law. In particular, the components of the UDHR
are considered to be international customary law and do not require signature or
ratification by the state to be recognised as a legal standard. The Universal
Declaration was also given legal force by two treaties –
 The International Covenant on Economic, Social and Cultural Rights (ICESCR)
 The International Covenant on Civil and Political Rights (ICCPR)
that were signed in 1966 and came into force in 1976. The Universal Declaration and
the two covenants are referred to as the International Bill of Rights.
What is the Universal Declaration of Human Rights? To use the exact words in the
text, the UN General Assembly proclaimed it as:
“a common standard of achievement for all peoples and all nations, to the end that every
individual and every organ of society, keeping this Declaration constantly in mind, shall
strive by teaching and education to promote respect for these rights and freedoms and
by progressive measures, national and international, to secure their universal and
effective recognition and observance…”
The Declaration begins by laying down its basic premise of “equality” – that “all human
beings are born free and equal in dignity and rights.” It goes on to give content to the
understanding of equality by prohibiting any distinction in the enjoyment of human
rights on such grounds as race, colour, sex, language, religion, political or otheropinion,
national or social origin, property, birth or other status.

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It then addresses rights relating to three critical areas – life and security; personal
freedom; and economic, social and cultural freedoms.
Life and Security:
The notion of personal dignity and security is developed through:
 the right to life, liberty and security;
 the right to be free from slavery, servitude,
torture or cruel, inhuman or degrading
treatment, or punishment; The scope of human rights protected by
international law is much wider than is
 the right of the individual to a just nationallegal sometimes appreciated.
system; and
Human rights are not limited to civil and
 the right to recognition as a person before the political freedoms and liberties, but
law, to equal protection of the law, to judicial include those economic, social and
remedy before a court for human rights cultural rights necessary for survival,
human development, and dignity.
violations, to be free from arbitrary arrest; to a These latter include the rights to
fair trial before an independent court; the adequate food, housing, health and
presumption of innocence; to not be subjected education, and the rights and freedoms
to retroactive penal law. associated with participating in cultural
and religious life.
[from Rights & Humanity, 1998]
Personal Freedom:
This includes:
 rights protecting a person’s privacy in matters concerning family, home,
correspondence, reputation and honour, and freedom of movement;
 the right to seek asylum, and to a nationality;
 the right to marry and found a family, the right to own property, and the prohibition
of arbitrary deprivation of property;
 the right to freedom of thought, conscience, and religion;
 the right to freedom of expression, peaceful assembly and association; and
 the right to take part in government.

Economic, Social and Cultural Freedoms:

Touching other aspects of the daily lives of people, the Declaration proclaims:
 the right to social security and the economic, social and cultural rights
indispensable to human dignity;
 the right to freedom of development of each individual’s personality;
These rights are to be realised through national efforts and international co-operation in
accordance with conditions in each state. It declares that everyone has:
 the right to work, to equal pay for equal work, and to a just and favourable
remuneration ensuring for the worker and the worker’s family an existence worthy
of human dignity;
 the right to form and join trade unions, to rest and leisure, reasonable limitations on
working hours and periodic holidays with pay;

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 the right to a standard of living adequate for health and well-being that includes food,
clothing, housing, medical care and access to social services and security if
necessary;
 the right to education and to participate in the cultural life of the community; and
 the right to protection of the moral and material interests resulting form scientific,
literary or artistic production.
The Declaration's authors were well aware that the rights they were proclaiming in 1948
were (and still are) far from universally respected. They also knew that to reach their
objective of universal enjoyment of those rights by everyone would require immense
effort by every individual and group in society. They thus addressed their callto action
not specifically to governments, but to "every individual and organ of society".
It is on the basis that the responsibility falls on every individual and group in societythat
the Global Compact Principles One and Two call on businesses not only todevelop an
awareness of human rights but also to work within their sphere of influence to uphold
these universal human rights.

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4.1 Human Rights: Principle 1

Businesses should support and respect the protection of

internationally proclaimed human rights within their
sphere of influence.

Why Human Rights Are Important for Business

The responsibility for human rights does not rest with governments or nation states alone.
Human rights issues are important both for individuals and the organisations that they
create. As part of its commitment to the Global Compact, the business community has a
responsibility to uphold human rights both in the workplace and more broadly within its
sphere of influence. A growing moral imperative to behave responsibly is allied to the
recognition that a good human rights record can support improved business
performance.
Reasons for companies to address human rights issues include:
Compliance with local and international law
As a minimum, business should strive to ensure that its operations are consistent with
the legal principles applicable in the country of operation. The consideration of lawsuits
against multinationals for poor practice outside their country of origin is a growing trend.
Promoting the rule of law
Businesses operating outside their country of origin may have an opportunity to promote
and raise standards in countries where support and enforcement of human rights issues
is insufficient. Societies where human rights are respected are more stable and provide
a good environment for business.
Addressing consumer concerns
Access to global information means that consumers are increasingly aware of where
their goods come from and the conditions under which they are made. A proactive
approach to human rights can reduce the potentially negative impacts of adverse
publicity from consumer organisations and interest groups.
Supply chain management
Global sourcing and manufacturing means that companies need to be fully aware of
potential human rights issues both upstream and downstream. Promoting best practice
in human rights will allow business to select appropriate business partners.
Increasing worker productivity and retention
Workers who are treated with dignity and given fair and just rewards for their work are
more likely to be productive and remain loyal to an employer. New recruits increasingly
consider the social and environmental record of companies when making their choice
of employer.
Building good community relationships

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Companies that operate on a global basis are visible to a large audience world-wide as
a result of the advances in communications technologies. Addressing human rights
issues positively can bring rewards both at site level, within local communities, as well
as in the broader global commons in which companies operate.

A US federal court recently accepted to hear a

lawsuit brought against a company for alleged
human-rights abuses, despite the fact that the
company is not American and the allegedabuses
did not occur in the USA.
Under the terms of the Alien Tort Claims Act,
civil lawsuits can be brought in the USA for
violations of international law based on the
reasoning that the claims against a defendant
“follow the defendant wherever he goes”.
[reported in World Watch, July/August 2002]

Bringing Human Rights Into Company Policy and Culture

A key starting point is for individuals within companies to develop an understanding of
the issues, for example by making reference to the Universal Declaration of Human
Rights. Companies also need to ensure that they are respecting existing national laws in
the countries where they operate, and identify how these may vary according to local
culture. Equally important is that respect for human rights is embedded in the core
values and culture of the organization.
The development and implementation of a human rights policy should take into account
any appropriate guidelines and, where possible, include input from and consultation with
relevant stakeholder groups.
Some ideas for bringing human rights into company policy are by –
 developing a company policy and strategy to support human rights,
 developing a health and safety management system,
 providing staff training on human rights issues and how they are affected bybusiness,
 providing staff training on internal company policies as they relate to human rights
 performing human rights impact assessments of business activities and reviewing
them regularly,
 discussing human rights impacts with affected groups, and
 working to improve working conditions in consultation with the workers and their
representatives.
Finally, there are a number of examples of how companies can guarantee human rights
through their daily activities:

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(a) In the workplace

 by providing safe and healthy working conditions,
 by guaranteeing freedom of association,
 by ensuring non-discrimination in personnel practices,
 by ensuring that they do not use directly or indirectly forced labour or child
labour, and
 by providing access to basic health, education and housing for the workers
and their families, if these are not provided elsewhere.
(b) In the community
 by preventing the forcible displacement of individuals, groups or
communities,
 by working to protect the economic livelihood of local communities, and
 by contributing to the public debate. Companies interact with all levels of
government in the countries where they operate. They therefore have the
right and responsibility to express their views on matters that affect their
operations, employees, customers and the communities of which they are a
part.
(c) Finally, if companies use security services to protect their operations, they must
guarantee that existing international guidelines and standards for the use of force are
respected.

Three Examples of activities by companies to address different aspects of Principle 1

are shown in the following pages.

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Company Example 1:

DuPont

In its submission of a case study to the Pilot Phase of the Global Compact Learning Forum,
DuPont specifically addresses Principle 1 in the context of the human right to safe and healthy
working conditions. The company moreover stresses that – “Safety values are critical in the
successful transfer of new technologies to developing countries.”
In 1994, as part of a process to increase transparency around its policy and operations, DuPont
adopted a Safety, Health, and Environmental (SHE) Commitment, which stated that the –
Goal is zero for all injuries, illnesses, and incidents' and that compliance with the Commitment is
the responsibility of every employee and contractor working on behalf of DuPont.
The adoption of the SHE Commitment was a major public commitment by the company to the
goal of zero injuries, illnesses, and incidents “anywhere that it operates in the world” and this
goal has since been extended to include contractors, suppliers, distributors, and customers.
DuPont reports that there is enhanced business value from a safe working environment, arising,
for example, from –
 Lower worker compensation expenses,
 Better rates from contractors and insurers,
 Enhanced productivity and dependability of supply,
 Enhanced reputation in the eyes of the public, the media, government regulators and the
local communities where it operates.
DuPont believes that the focus on safety is core to a company's activities and that there are key
practices that are necessary for the system to work. These are –
 The commitment of top management to the value of safety and occupational health,
 The line management must be personally accountable and responsible for safety and
occupational health performance,
 An expectation within the company of zero injuries, illnesses, and incidents,
 Auditing and verification,
 Employee involvement, and
 Networks to share information broadly.
Based on its belief that the practices and specific tools that it has developed are transferable to
other companies, DuPont has now established a business unit to assist other organisations in
adopting them.
DuPont points out in its submission that its commitment to safety and health in the workplace is
global – so all sites are expected to have the same performance. As an example it cites the
case that, when a new plant was built in Shanghai, the goal of zero injuries and illnesses was
automatically established. As a result of the safety focus, there was only one minor injury in
over 2 million man-hours of work over a two-year period, and the project was completed on time
and within budget. Specific safety and health programs included:
 Personal protection equipment was provided and its use was required at all times,
 Construction safety specialists were on site during the entire project to assure that
standards were followed,
 The Project Manager and Construction Manager conducted weekly site audits relative to
safety procedures and performance, and
 Goals were set and publicised broadly and milestones were set and celebrated when they
were reached.

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Company Example 2:

Amazon Caribbean Guyana Ltd

Amazon Caribbean Guyana Ltd operates in several regions of Guyana, producing, canning and
exporting organic heart of palm. The company presents its work in the north-west region of
Guyana as supporting the protection of human rights for Amerindian Communities. In particular,
its work seeks to address articles 23-26 of the Universal Declaration which includethe right to
work, rest and leisure, a standard of living adequate for health and well being, and to education.
The company set up a canning factory for hearts of palm, a non-traditional forestry product, that
provides direct employment for around 600 indigenous people and indirect support for over 3000
family members. The operation was originally set up to take advantage of the raw materials in
the area but the needs of the community suggested that additional social arrangements were
necessary to support the long-term development of the project.
In addition to employment in the factory, the company supplies basic food items at a subsidised
cost, and provides boats that travel to remote villages to barter rice, sugar and flour for hearts of
palm. Amazon has also built a school and provide resources and support to teachers and to
students who wish to pursue further studies. The company provides logistics and medical supplies
to the local community, such as by ensuring that fresh water is available during the dry season.
These services were developed by the company as there are no publicly provided services in the
region.
The support programmes have resulted in better health and nutrition of the community, and this
enhances family unity. For the company, this results in reduced absenteeism and has improved
production efficiency by 15%. Amazon also promotes the traditional skills of the different tribes,
such as fishing and hunting, farming, boat building and building to enhance community stability.
Work by the company is undertaken in association with two associations - the Amerindian
association (Taamog) that represents the local community and an association that is involved with
sustainable forestry practice (Tropmebos.)
Amazon indicates that successful private investment needs to be supported by attention to the
social requirements and activities of employees and local communities. The longevity of this
project (13 years) and the observed failure of other companies working in a similar field, but
adopting a less holistic approach, support this view.

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Company Example 3:

SAP

SAP is the world’s largest inter-enterprise software company and has strong internal vision and
values that seek to support fair business practices. The company is working to develop these
issues more formally so that they may be incorporated into policy and practice world-wide. SAP
has presented to the Global Compact a project that is supported by SAP Africa and that
demonstrates how the company is developing its stance on human rights.
SAP has long been outspoken about the issue of business integrity on the ground in Africa
because it has often made daily business life very difficult for the company. Through the
company’s Nigeria office, SAP is now developing a Convention on Business Integrity (CBI).
The CBI is a –
“declaration against corrupt business practices and stands for ethical conduct, competence,
transparency, accountability and a commitment for the company and its partners to do what is
right, just and fair.”
The primary purpose of the CBI is to encourage the establishment of a minimum standard for
business integrity in Nigeria.
Developed initially by an employee in the company’s Nigeria office as a response to practical
problems experienced in the course of business, the code seeks to promote fair business
practices and encourages partners and customers to play an active role. The code, which has
been developed with the support of advisers from Transparency International and INTEGRITY
Nigeria, is not a legal document. Rather, it is a moral contract between consenting parties.
The rating systems of the code include the following factors:
 Competence;
 Ethics and Morals;
 Transparency and Accountability;
 Will and Power;
 Commitment.
Signatories must show good faith by ratifying the code, which involves incorporating the
requirements of the code into their core business practices. Following a review to assess for
satisfactory compliance, businesses can then progress to sign the convention. Periodic
compliance checks and stakeholder transparency seek to guard against substandard practice.
SAP is now seeking to drive the project forward and to support the independence of a CBI
secretariat. If successful, the project may be expanded to other countries where the company’s
business activities are affected by corruption.
This is an interesting case study since it deals with business integrity, or to give it its more common
name “corruption”. At the moment no Global Compact Principle deals explicitly with corruption
although it has been suggested as a good candidate for the “Tenth Principle”. However, Principle
1 implicitly includes corruption since it requires the company, “within its sphere of influence”, to
protect the economic livelihood of local communities. It is clear that, when corruption is involved
in a business transaction, normally a small number of peoplebenefit at the expense of the
whole community. And Principle 2 touches on corruption in the context of bribery to undermine
the political or judicial system.

4.2 Human Rights: Principle 2

Businesses should make sure their own corporations are

not complicit in human rights abuses.
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Complicity
Many agree that “complicity” is a difficult concept to appreciate and categorise [see box
below], and understanding complicity in order to avoid complicity in human rights
violations, represents an important challenge for business. As the dynamics between
governments, companies, and civil society organisations
is changing, so too does our understanding of when and “Complicity is not a static
concept. The contemporary
how different organisations should take on limits of what is meant by
responsibilities for human rights issues. Whilst complicity tell us a lot about our
recognising that the role of governments in ensuring sense of community and
respect for human rights continues to be extremely responsibility towards others.”
important, the changing operating context for business
Mary Robinson
has prompted the Office of the High Commissioner for [UN High Commissioner for
Human Rights (OHCHR) to lead efforts to define what Human Rights]
constitutes corporate complicity in human rights abuses.
It is important to understand that in a business context the
notion of complicity can occur in a number of forms –
Direct Complicity
Occurs when a company knowingly assists a state in violating human rights. An example
of this is in the case where a company assists in the forced relocation of peoples in
circumstances related to business activity.
Beneficial Complicity
Suggests that a company benefits directly from human rights abuses committed by
someone else. For example, violations committed by security forces, such as the
suppression of a peaceful protest against business activities or the use of repressive
measures while guarding company facilities, are often cited in this context.
Silent Complicity
Describes the way human rights advocates see the failure by a company to raise the
question of systematic or continuous human rights violations in its interactions with the
appropriate authorities. For example, inaction or acceptance by companies of systematic
discrimination in employment law against particular groups on the grounds of ethnicity or
gender could bring accusations of silent complicity.

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Contemporary Issues
Human rights issues have become increasingly important as the nature and scope of
business has changed. Different actors have different roles to play and it is important
for business to be aware of the contemporary factors that have made human rights an
organisational issue.
Globalisation – the growth in private investment has witnessed companies expanding
operations to countries previously untouched by global markets. In some instances these
countries have poor human rights records and/or the capacity of the state to address
these issues is limited. In these cases the role of business in promoting and respecting
human rights is particularly important.
Growth of Civil Society – in some instances the capacity of the state to address human
rights issues has diminished. As a result, a steady alienation of people has occurred
towards just those public institutions that were established to serve them. Non-
governmental organisations of all types and sizes have grown to fill the void -
progressively influencing both public policy and the market agenda. They include new
human rights, labour and corporate accountability organisations.
Transparency and Accountability – the need for transparency in business practice has
been highlighted both by globalisation, the growth of civil society interests and some
recent problems in the corporate sector. Advances in information technologies and global
communications mean that companies can ill afford to conceal poor or questionable
practices.

Possible Actions by Business

An effective human rights policy will help companies avoid being implicated in human
rights violations. In order to avoid such situations, companies may wish to consider the
following:
 Has the company made a human rights assessment of the situation in countries
where it does, or intends to do, business so as to identify the risk of involvement
in human rights abuses and the company's potential impact on the situation?
 Does the company have explicit policies that protect the human rights of workers
in its direct employment and throughout its supply chain?
 Has the company established a monitoring system to ensure that its human rights
policies are being implemented?
 Does the company have an explicit policy to ensure that its security arrangements
do not contribute to human rights violations? This applies whether it provides its
own security, contracts it to others or in the case where security is supplied by
the State.
 Does the company actively engage in open dialogue with human-rights
organizations?
With respect to this last issue it is suggested that businesses:
 respect international guidelines and standards for the use of force (e.g. the UN
Basic Principles on the Use of Force and Firearms by Law Enforcement Officials
and the UN Code of Conduct for Law Enforcement Officials);
 if financial or material support is provided to security forces, establish clear
safeguards to ensure that these are not then used to violate human rights; and

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make clear in any agreements with security forces that the business will not
condone any violation of international human rights laws; and
 privately and publicly condemn systematic and continuous human rights
abuses.

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Company Example 4:

British Telecom (BT)

British Telecom (BT) is a wholly owned subsidiary of BT Group Plc. BT has recognised through
its Statement of Business Practice ‘The Way We Work’ that the company can have a global
impact. As such the company has acknowledged the need to manage activities in a socially
responsible manner. This commitment has resulted in an extensive human rights programme that
is managed by a number of departments and units throughout the business. One key project has
been the establishment of ‘Sourcing with Human Dignity’, a supply chain initiative.
Sourcing with Dignity promotes universal standards, in particular the United Nations Universal
Declaration of Human Rights and the International Labour Organisation Conventions on labour
standards. By working collaboratively with suppliers BT is seeking to identify areas of risk and
work towards the improvement of practices and standards so that any identified human rights
abuses are eradicated.
Existing suppliers and new tenders are required to sign an Agreement or Clause that commits
them to work towards principles that include public reporting, awareness raising and training,
monitoring and independent verification, and continuous improvement. As part of this programme
BT has also committed to report publicly the number and proportion of suppliers signing the
agreement, as well as the number of suppliers who have contractually agreed to work towards
the standard. The company also aims to hold forums with suppliers and other network members.
BT has also recognised the potential impacts on human rights of the telecommunications
industry in the areas of freedom of expression, privacy and intellectual property. For example,
increased use of the internet by all members of society means that the company is obliged to
strike a balance between freedom of expression and the need to protect children with respect to
content of the material that can be accessed. Part of the company’s commitment to uphold Article
19 of the UDHR is realised through being a board member of the Internet Content Rating
Association (ICRA). This organisation has the explicit aim of protecting “ … children from
potentially harmful material; and, to protect free speech on the internet".
The company indicates that –
“this is achieved by asking web authors to give details of what is and isn't present on their site,
information which is then used to generate a content label (a short piece of computer code) which
the author adds to the site. Parents can then set their internet browser to accept or reject access
to certain types of content. The key point for freedom of expression is that ICRA does not itself
rate internet content - the content providers do that if they wish to participate.”

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4.3 Discussion Themes

1. The Universal Declaration of Human Rights forms a template for human rights. What
additional issues might an updated Declaration seek to include?
2. What issues might a European-based textile company consider, when establishing
a new operation in China?
3. With reference to the company Example 2: What issues arise when companies
provide social services and support structures for the communities in which they
operate?
4. With reference to the company Example 2: Consider the challenges and benefits of
working with non-governmental organisations in the area of human rights? Which
organisations might be most relevant to your business/ industry?
5. With reference to the company Example 2: How might this company develop and
communicate measures of progress on human rights issues to its stakeholders?
6. With reference to the company Example 3: The company implies that fair business
practices bring business benefits. What improvements might the company expect
to see?
7. With reference to the company Example 3: The company presents the development
of this code as a possible solution to unregulated activity which is undermining
legitimate, law abiding business. With reference to your own experiences consider
the difficulties of implementing such a code. What might the alternatives be?
8. Consider and discuss the options for companies operating, or investing in countries
where human rights records are questionable.
9. A manager suspects that the private security firm safeguarding his mining site may
have mistreated members of the local community by forcibly ending their peaceful
protests situated on the site perimeter. What action should the company take?
10. With reference to the Example 4: The example highlights how emerging technologies
can raise new human rights questions for companies. Consider how changes in
operating practice or the introduction of new technologies in your industry, may
generate new human rights concerns.

5. An Introduction to Labour

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Topics –
what is meant by freedom of association
the nature of collective bargaining
strategies that business can adopt to enact Principle 3
the different forms that forced and compulsory labour may take
approaches that business can take to eliminate forced labour
the issues and problems of child labour
definitions of child labour and the worst forms of child labour
a range of possible strategies that companies can adopt to
combat child labour
different areas where discrimination can take place
forms of discrimination
strategies that business can employ to combat discrimination

The four labour principles of the Global Compact draw on the International Labour
Organisation’s (ILO) Declaration on Fundamental Principles and Rights at Work, which
was adopted at the 86th International Labour Conference in 1998. The ILO has a unique
(tri-partite) structure composed of governments, employers and workers, and is the only
UN agency whose membership is composed of governments and business. Hence, the
Declaration represents a universal consensus among those concerned with labour issues
that the principles need to be promoted and protected world-wide.
These principles are also the subject of ILO Conventions. The conventions are treaties
that member States ratify, thus accepting to be legally bound by them. All countries –
whether or not they have ratified the relevant Conventions – have an obligation "to
respect, to promote and to realise in good faith" the principles.
Four categories of principles and rights that are identified in the Declaration are reflected
in the Global Compact principles –
 to promote and realise in good faith the right of workers and employers to freedom
of association and the effective right to collective bargaining;
 to work towards the elimination of all forms of forced or compulsory labour;
 the effective abolition of child labour; and
 the elimination of discrimination in respect of employment and occupation.
The aim of the ILO is to harness the support of the business community through the
Global Compact. Labour Rights principles Three, Four, Five and Six deal with
fundamental principles in the workplace and the challenge for business is to take these
universally accepted values and apply them at the company level.

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5.1 Labour: Principle 3

Businesses should uphold the freedom of associationand

the effective recognition of the right to collective
bargaining.

Freedom of Association and Collective Bargaining

Businesses face many uncertainties in this rapidly changing global market. Establishing
genuine dialogue with freely chosen workers' representatives enablesboth workers and
employers to understand each other's problems better and find ways to resolve them.
Security of representation is a foundation for building trust on both sides. Freedom of
association and the exercise of collective bargaining provide opportunities for
constructive rather than confrontational dialogue, and this harnesses energy to focus on
solutions that result in benefits to the enterprise, its stakeholders, and society at large.
A number of studies indicate that the dynamic that results from freedom of association
can set in motion a "decent work"-cycle that increases productivity, incomes and profits
for all concerned. The guarantee of representation through a “voice at work” facilitates
local responses to a globalised economy, and serves as a basis for sustainable growth
and secure investment returns. The results help bridge the widening representational
gap in global work arrangements, and facilitate the input of those people, regions and
economic sectors – especially women and informal sector workers – who otherwise may
be excluded from participating in processes that build decent work environments.
Freedom of Association
Freedom of association implies a respect for the right of employers and workers to join
associations of their own choice. It does not mean that workforces must be organised or
that companies must invite unions in. Employers should not interfere in an employee’s
decision to associate, or discriminate against the employee or a representative of the
employee.
“Association” includes activities of rule formation, administration and the election of
representatives. The freedom to associate involves employers, unions and workers
representatives freely discussing issues at work in order to reach agreements that are
jointly acceptable. These freedoms also allow for industrial action to be taken by workers
(and organisations) in defence of their economic and social interests.
Collective Bargaining
Collective bargaining refers to the process or activity leading up to the conclusion of a
collective agreement. Collective bargaining is a voluntary process used to determine
terms and conditions of work and the regulation of relations between employers,workers
and their organisations.
An important part of the effective recognition of the right to collective bargaining is the
‘principle of good faith’. This is important for the maintenance of the harmonious
development of labour relations. This principle implies that the social partners work
together and make every effort to reach an agreement through genuine and constructive
negotiations, and that both parties avoid unjustified delays in negotiations.

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The principle of good faith does not imply a pre-defined level of bargaining or require
compulsory bargaining on the part of employers or workers and their organisations.

Possible Strategies for Business

The Global Compact does not suggest that employers change their industrial relations
frameworks. However, as organisations such as the International Organisation for
Employers have indicated, some ‘high performance’ companies have recognised the
value of using dialogue and negotiation to achieve competitive outcomes.
Some suggestions about what companies can do –
 in the workplace,
 at the bargaining table, and
 in the community,
are shown in the Table on the following page.

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Table 2: Some Activities to Support Freedom of Association and Collective

Bargaining.

In the workplace Ensure that all workers are able to form and join a trade
union of their choice without fear of intimidation or reprisal.
Ensure union-neutral policies and procedures in such areas
as applications for employment and record-keeping; and
decisions on advancement, dismissal or transfer.
Provide facilities to help worker representatives carry out
their functions within the company's needs, size and
capabilities.
These facilities include the ability to collect union dues on
company premises, posting of trade union notices, and
distribution of union documents related to normal trade union
activities in the enterprise, and time-off with pay for union
activities.

At the bargaining table Recognise representative organisations for the purpose of

collective bargaining.
Use collective bargaining as a constructive forum for
addressing working conditions and terms of employment
and relations between employers and workers, or their
respective organisations.
Address any problem-solving or preventive need within the
imagination and interests of workers and management,
including restructuring and training needs, redundancy
procedures, safety and health issues, grievance and dispute
settlement procedures, disciplinary rules, and family and
community welfare.
Provide information needed for meaningful bargaining.
Balance dealings with the most representative trade union to
ensure the viability of smaller organisations to continueto
represent their members.

In the community of operation Take account of the climate in labour-management relations

in the country when ensuring freedom of association and
collective bargaining. In countries with insufficient legal
protections, take steps to preserve the safety and
confidentiality of trade unions and their leaders.
Support the establishment and functioning of local/national
employers’ organisations, and trade unions.
Inform the local community, media and public authorities of
your company's endorsement of the UN Global Compact
and its intention to respect its provisions, including those
on fundamental workers' rights.

Company Example 5:

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Statoil

Statoil is a leading oil and gas supplier with operations in 21 countries world-wide. It has
developed an approach to labour relations that is built on the Norwegian tradition of dialogue and
co-operation between employers and workers. The company employs over 16,000 people in its
operations and it recognises that the extent to which labour rights are respected can vary from
one country to another. The large geographical spread means that the company encounters
“great variations in terms of socio-economic development and degree of political freedom” at its
various operations.
To meet the challenge of upholding labour standards globally the company has entered into an
agreement with the International Federation of Chemical, Energy, Mine and General Workers
Unions (ICEM). The agreement, which was signed in 1998 and renewed in March 2001, is the
first agreement of its kind between a labour federation like ICEM and an individual company.
Statoil stresses that this is a global agreement that focuses on bringing about improvements at
the local level “without interfering with established local practices”.
The purpose of the agreement is to,
“ create an open channel of information between ICEM and Statoil Management about industrial
relations issues in order to continuously improve and develop good work practice in Statoil’s
world-wide operations.”
Working with ICEM assists Statoil in developing an approach to labour relations that respects
the integrity of its employees and their intrinsic human rights. The 2001 modification of the
agreement was adapted to the principles of the Global Compact and focuses specifically on the
four labour principles. In particular it embraces freedom of association and collective bargaining,
which the company aims to promote with ICEM through joint training and awareness raising
programmes.
The company believes that labour relations are best managed in accordance with local conditions
with employees responding most effectively to those closest to the issues. Implementation is
therefore devolved to specific business units and countries. In this respect Statoil has participated
in an ICEM project to train trade union representatives from Azerbaijan.
Progress in relation to the agreement is evaluated through meetings and consultations with the
ICEM. The company indicates an aim to increase the frequency of these events as the
relationship between the two organisations matures.
Statoil suggests that the agreement provides an excellent approach to improving risk
management as it allows a greater insight into the causes of labour disputes, and facilitates
collaborative means for conflict resolution.

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5.2 Labour: Principle 4

Businesses should uphold the elimination of all forms of

forced and compulsory labour.

Forced and Compulsory Labour

Forced or compulsory labour is any work or service that is extracted from any person
under the menace of any penalty, and for which that person has not offered himself or
herself voluntarily. Providing wages or other compensation to a worker does not
necessarily indicate that the labour is not forced or compulsory. By right, labour should
be freely given and employees should be free to leave in accordance with established
rules.
Forced labour deprives societies of the opportunity to develop human resources for the
modern labour market, and to develop skills and educate children for the labourmarkets
of tomorrow. The debilitating consequences of forced labour are felt by the individual, in
particular by children, as well as by the economy itself since the degradation of human
capital and social stability results in insecure investments.
By retarding the proper development of human resources, forced labour lowers the
level of productivity and economic growth for society generally. The loss of income due
to disruption of regular jobs or income-generating activities reduces the lifetime earnings
of whole families and with it, the loss of food, shelter, and health care.
While companies operating legally do not normally employ such practices, forcedlabour
can become associated with enterprises through their use of contractors and suppliers.
As a result, all managers should be aware of the forms and causes of forced labour, as
well as how it might occur in different industries. Forced and compulsory labour can take
a number of forms:
 slavery,
 bonded labour or debt bondage, an ancient practice but still in use in some countries,
in which both adults and children are obliged to work in slave-like conditions to repay
debts of their own or their parents or relatives,
 child labour in particularly abusive conditions where the child has no choice about
whether to work,
 the work or service of prisoners if they are hired to or placed at the disposal of private
individuals, companies or associations involuntarily and without supervision of public
authorities,
 labour for development purposes required by the authorities, for instance to assist
in construction, agriculture, and other public works,
 work required in order to punish opinion or expression of views ideologically opposed
to the established political, social or economic system, and
 exploitative practices such as forced overtime or the lodging of deposits (financial
or personal documents) for employment.
Strategies for Business

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Organisations need to determine whether forced labour is a problem within their

business sector. It is important to mention that, although high profile cases aretypically
reported as occurring in developing countries, forced labour is also present in developed
countries and as such should be viewed as a global issue.
Understanding the causes of forced labour is the first step towards taking actionagainst
forced labour, which requires a comprehensive set of interventions to address not only
the needs of individual forced labourers but also the needs of their families. Therefore, if
forced labour is identified then these individuals should be removed and facilities and
services should be provided to enable them to make adequate alternatives.
In general, a combination of workplace and community actions is needed to help
ensure the eradication of forced labour practices, such as those in Table 3.

Table 3: Actions by Business to Eliminate Forced and Compulsory Labour.

make available to all employees, employment contracts stating theterms

and conditions of service, the voluntary nature of employment,the
freedom to leave (including the appropriate procedures) and any
penalties that may be associated with a departure or cessation of work
in planning and conducting business operations, ensure that workers in
debt bondage or in other forms of forced labour are not engaged and,
where found, provide for the removal of such workers from the workplace
with adequate services and provision of viable alternatives in the
In the workplace community of operation
institute policies and procedures to prohibit the requirement that workers
lodge financial deposits with the company
if hiring prisoners for work in or outside prisons, ensure that their terms
and conditions of work are similar to those of a free employment
relationship in the sector involved, and that they have given their consent
to working for a private employer
ensure that large scale development operations in which an employer
participates do not rely on forced labour in any phase

assist in the development of guidelines by sectoral industrial associations

and small or medium enterprises where debt bondage or such practices
are known to be commonplace
support and help design education, vocational training, and counselling
In the community programmes for children removed from situations of forced labour
of operation help develop skills training and income-generating alternatives, including
micro-credit financing programmes, for adults removed from situations of
forced labour
encourage supplementary health and nutrition programmes for workers
removed from dangerous forced labour, and provide medical care to
assist those affected by occupational diseases and malnutrition as a
result of their involuntary work

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Company Example 6:

BASF

BASF is one of the world’s leading, transnational chemical companies producing a range of
products that include high value chemicals, plastics, colorants and pigments, automotive and
industrial coatings, agricultural products and fine chemicals. The company’s submission of a case
study to the Pilot Phase of the Global Compact Learning Forum addresses the issue of forced
labour directly both by outlining current operating standards and significantly by indicating how
recompense is being made for unacceptable practices that occurred in the company’s past.
Contemporary Standards
BASF has committed itself to the protection of human rights and to upholding labour standards
by incorporating these issues into the company policy document Values and Principles, issued
in 2000. The company observes the standards set out in the International Labour Organisation’s
June 1998 Declaration on Fundamental Principles and Rights at Work. With over 90,000
employees around the world, BASF has developed a comprehensive employee programme that
includes issues such as flexible working hours, personal development, occupational health and
safety, co-operation with unions, anti-discrimination and equal opportunity.
Addressing the Past
However, BASF recognises that for a period of the company’s recent history these employee
rights were not respected. During the Second World War BASF was merged with otherindustries
to form I.G. Farbenindustrie, a company that forced millions of people to work for the German war
effort. A significant period of the company’s development was therefore marked by substandard
labour practices.
As a sign of reconciliation BASF, together with 15 other major German companies, has
contributed to the foundation of the initiative ‘Remembrance, Responsibility and the Future’. This
is an initiative that explicitly recognises and takes responsibility for the use of forced labour and
human rights abuses that occurred in the company’s past. The initiative contributes funds towards
a Federal German Foundation fund so that recompense may be made to former forced labourers
under the Nazi regime.
Exploring the company’s history and reporting on these past experiences (a book will bepublished
in 2002) demonstrates an accountability, and reinforces the company’s commitment to
contemporary activities that provide fair and just working conditions.

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5.3 Labour: Principle 5

Businesses should uphold the effective abolition of

child labour.

Child Labour
Child labour has occurred at some point in time in virtually all parts of the world as nations
have undergone different stages of development. It remains a serious issue today in
many developing countries – although it also exists (more invisibly) in the developed,
industrialised countries where it occurs for example in some immigrant communities.
Child labour deprives children of their childhood and their dignity. Many of the children
work long hours for low or no wages, often under conditions harmful to their health,
physical and mental development. They are deprived of an education and may be
separated from their families. Children who do not complete their primary education are
likely to remain illiterate and never acquire the skills needed to get a job and contribute
to the development of a modern economy. Consequently child labourresults in scores
of under-skilled, unqualified workers and jeopardises future improvements of skills in the
workforce.
Child labour occurs because of the pressures of poverty and lack of development, but
also simply as a result of exploitation. It exists both in the formal and in the informal
economy. However, it is in the latter case where the majority of the worst forms of child
labour are found.
Although children enjoy the same human rights as adults, their lack of knowledge,
experience and power means that they also have distinct rights by virtue of their age.
These rights include protection from economic exploitation and work that may be
dangerous to their health or morals and that may hinder their development. This does
not mean that children should not be allowed to work, rather that there are standards
that distinguish what constitutes acceptable or unacceptable work for children at different
ages and stages of their development.
Employers should not use child labour in ways that are socially unacceptable and that
lead to a child losing his or her educational opportunities. The complexity of the issue of
child labour means that companies need to address the issue sensitively, and not take
action which may force working children into more exploitative forms of work.
Nevertheless, as Principle 5 states, the goal of all companies should be the abolition of
child labour within their sphere of influence.
It is useful to mention that the use of child labour can damage a company's reputation.
This is especially true in the case of transnational companies who have extensive supply
and service chains, where the economic exploitation of children, even by a business
partner, can damage a brand image and have strong repercussions on profit and stock
value.

Definitions

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ILO conventions recommend a minimum age for admission to employment or work that
must not be less than the age for completing compulsory schooling, and in any case
not less than 15 years. Lower ages are permitted – generally in countries where
economic and educational facilities are less well-developed the minimum age is 14 years
and 13 years for ‘light work’. On the other hand the minimum age for hazardous work is
higher at 18 years.

Developed Countries: Developing Countries:

Light work 13 years Light work 12 years
Regular work 15 years Regular work 14 years
Hazardous work 18 years Hazardous work 18 years

Priority is given to eliminating, for all persons under the age of 18, the worst forms of
child labour, including hazardous types of work or employment. The worst forms of child
labour are defined as –
 all forms of slavery – this includes the trafficking of children, debt bondage, forced
and compulsory labour, and the use of children in armed conflict;
 the use, procuring or offering of a child for prostitution, for the production of
pornography or for pornographic purposes;
 the use, procuring or offering of a child for illicit activities, in particular the
production and trafficking of drugs; and
 work which is likely to harm the health, safety or morals of the child as a
consequence of its nature or the circumstances under which it is carried out.

Strategies for Companies

Developing an awareness and understanding of the causes and consequences of child
labour is the first step that a company can take toward action against child labour. This
means identifying the issues and determining whether or not child labour is a problem
within the business. Companies sourcing in specific industry sectors with geographically
distant supply chains need to be particularly vigilant.
However, discovering if child labour is being used can be difficult, for example in the case
where documents or records are absent, and companies may consider using local non-
governmental organisations, development organisations or UN agencies to assist in this
process.
If an occurrence of child labour is identified, the children need to be removed from the
workplace and provided with viable alternatives. These measures often include enrolling
the children in schools and offering income-generating alternatives for the parents or
above-working age members of the family. Companies need to be aware that, without
support, children may be forced into worse circumstances such as prostitution, and that,
in some instances where children are the sole providers of income, their immediate
removal from work may exacerbate rather than relieve the hardship.

Actions

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What can business do concretely? Its actions should be focussed not only on the
workplace but also in the community in which it is operating. Some examples of possible
activities are given in the Table below.

Table 4: Possible Actions by Business to Combat Child Labour.

adhere to minimum age provisions of national labour laws and

regulations and, where national law is insufficient, take account of
international standards
use adequate and verifiable mechanisms for age verification in
recruitment procedures
when children below the legal working age are found in the workplace,
take measures that provide for their removal along with adequate
In the workplace services and viable alternatives both for the children and their families
exercise influence on subcontractors, suppliers and other business
affiliates to combat child labour
develop and implement mechanisms to detect child labour
make sure adult workers are given secure employment and decent
wages and working conditions so that they do not need to send their
children to work

assist in the development of guidelines by sectoral industrial

associations and small to medium sized enterprises
support and help design educational, vocational training, and
counselling programmes for working children, and skills training for
In the community parents of working children
encourage and assist in launching supplementary health and nutrition
programmes for children removed from dangerous work, and provide
medical care to cure children of occupational diseases and malnutrition
help raise awareness about child labour and mobilise business sectors
and society in general to take action against child labour

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Company Example 7:

Shell [www.shell.com]

Shell was the first major energy company to publicly support the United Nations Universal
Declaration of Human Rights and to incorporate this commitment into the organisation’s General
Business Principles. As part of this commitment the company has embarked on an ongoing
programme of internal education and external consultation to ensure that Shell companies do not
exploit children in the course of their activities, either directly or indirectly through joint ventures,
contractors or suppliers. Moreover, Shell has published a primer “Business and Child Labour”
that looks at the causes and types of child labour, major legal instruments that address the issue
and how child labour affects and is affected by international businesses. It is used within Shell to
provide background information and guidance for managers on the issue.
Shell points out that child labour might not seem to be an important issue for a major company
in the energy sector, presumably taking into consideration the type of work that is involved.
However, they perceive it as a potential problem, particularly in relation to their contractors and
suppliers, and have carried out monitoring of the current situation. They report that –
 in every Shell company, employees are above the local legal age of employment. The
youngest company employee is 15 years old and works part-time in Europe.
 Shell companies in 101 countries have a specific policy to prevent the use of child labour in
any of their operation;
 the number of Shell companies that screen contractors and supplier is increasing (63 and
41 respectively in 1999). Screening includes anti-child labour clauses in contracts and a
requirement that all suppliers observe the ILO Minimum Age Convention No. 138.
While Shell does not claim that this provides complete assurance, they do believe that it indicates
clearly to Shell companies, and those they work with, that the use of child labour is unacceptable.
One such initiative has been recognised by a local Brazilian non-governmental organisation
ABRINQ, supported by UNICEF. They awarded Shell Brasil the title of “Child Friendly Company”
for its work to discourage the use of child labour in the production of sugar cane alcohol, which it
is legally obliged to sell in its garages and include in its gasoline.
In Brazil the use of alcohol in fuel has resulted in extensive growth of the sugar cane industry.
To boost the income obtained from cane harvests many employers have used child labour (in
Brazil the legal minimum working age is 14 years). Shell Brasil sells gasoline and buys alcohol
from distilleries. Since 1999 the company has had a clause in its contract with distilleries which
states that –
“the SUPPLIER is obliged to adopt and respect in full Shell’s General Business Principles and
to conduct its activities in total agreement with these principles. In this context and in line with
applicable legislation, the use of child labour is absolutely unacceptable and the SUPPLIER is
forbidden to adopt such practice.”
Suppliers found using child labour will have their contracts terminated. To date, all suppliers have
supported the clause.
In addition, the company has participated in a broader debate with NGO’s, local government
and distillers to examine how to help families whose children work in the sugar cane fields. One
initiative has been the creation of funds to educate children who would otherwise be working to
support their families.

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Company Example 8:

Hennes & Mauritz AB [www.hm.com]

Hennes & Mauritz AB (H&M) submitted the following example as its contribution to the Learning
Forum for 2002. The example addresses specifically the use of child labour in Bangladesh. H&M
comments that there is a strong demand for child labour in Bangladesh because they can be
cheaply employed and easily dismissed. The children have low skills and are, therefore, in aweak
bargaining position. However, H&M reports that the vast majority of the children would attend
school if they were given the opportunity.
As a part of H&M's social responsibility programme the company is financing development
projects that are related to its Code of Conduct and the abolition of child labour. One example
of such a project relates to vocational training for young textile workers in Bangladesh. The
programme is intended to train ex-child labourers, who had previously lost their jobs because they
were under age, and who have since received basic education through the so-called MOU-
schools set up according to the MOU between the US and Bangladesh governments. The project,
which began in spring 1999, includes a four-month theoretical and three-month practical
programme that leads to guaranteed employment as a machine operator at one of H&M's
suppliers. H&M also pays the students' wages during the course as a means of support to their
families. At present there are 55 students undergoing training.
The need for vocational training in Bangladesh today is enormous. Garments are the country’s
leading export and it is important for the future of the country to increase the level of skills in the
garment industry. In line with H&M’s expectations and goals, the education level of the students
undergoing training in its programme has improved, both theoretically and practically. The
students are not only trained to be good sewing operators, but are also taught to be positive
thinkers and socially aware. An additional point is that there has been an increased awareness
among the families of the students of the importance of education.
According to a UNICEF consultant, familiar with the project –
“ … H&M’s initiative to facilitate skill training for the concerned children in Bangladesh is highly
praise worthy. Being an international buying house, this initiative is not necessarily required by
H&M. Despite this, [it has] proved to be successful in promoting its idea. In fact, it has set an
example for the local manufacturers and the concerned organisations, of how such an important
and required project can be implemented in a country like Bangladesh.”

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Company Example 9:

William E. Connor & Associates Ltd.

William E. Connor & Associates Ltd. described the following case in its submission to the Learning
Forum in 2002. The action addresses directly Principle 5 of the Global Compact.
“On March 15, 2001, we were conducting a social compliance audit at one of our suppliers in
Southern China. During the plant tour, we found that one of the operators working in the looping
department looked very young. We checked the personnel records and discovered that she was
below the minimum working age in China. According to the local labour law the minimum working
age is 16.
A meeting was held with the supplier and we requested the supplier to follow the guidelines set
by SA 8000, i.e. to provide school fees, to give an allowance to her family [to compensate for her]
losing this job, [and to pay the allowance] until she reached the legal minimum workingage.
The supplier also agreed to provide transportation to her hometown about 800 km away and
agreed to re-employ the girl if she wanted to work there again after she finished her
studies.
Last December we sent someone from our office to visit the girl. She had just finished her studies
and was helping her family on the farm. She told us that she would go back to the factory again
after the Chinese New Year. We just received a message from the supplier stating the girl was
back in the factory as a looping operator on Feb 25, 2002.”

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5.4 Labour: Principle 6

Businesses should uphold the elimination of

discrimination in respect of employment and occupation.

Discrimination
The definition of discrimination in employment and occupation is "any distinction,
exclusion or preference which has the effect of nullifying or impairing equality of
opportunity or treatment in employment or occupation", and is made on the basis of
"race, colour, sex, religion, political opinion, national extraction or social origin".
Obviously, distinctions based strictly on the inherent requirements of the job are not
discrimination.
Discrimination can arise in a variety of work-related activities. These include access to
employment and to particular occupations, and to training and vocational guidance.
Moreover, it can occur with respect to the terms and conditions of the employment,
such as for example equal remuneration, hours of work and rest, paid holidays, maternity
leave, security of tenure, advancement, social security, and occupational safety and
health. In some countries additional issues for discrimination in the workplace, such as
age and HIV status, are growing in importance. It is also important to realise that
discrimination at work arises in a range of settings, and can be a problem in a rural
agricultural business or in a high technology city-based business.
Non-discrimination means simply that employees are selected on the basis of their ability
to do the job and that there is no distinction, exclusion or preference made on other
grounds. Employees who experience discrimination at work are denied opportunities and
have their basic human rights infringed. This affects the individual concerned and
negatively influences the greater contribution that they might make to society.

Discrimination – Direct and Indirect

Discrimination can take many forms, both in terms of gaining access to employment and
in the treatment of employees once they are in work.
It may be direct, such as when laws, rules or practices explicitly cite a reason such as
sex or race to deny equal opportunity. Most commonly, discrimination is indirect and
arises where rules or practices have the appearance of neutrality but in fact lead to
exclusions. This indirect discrimination often exists informally in attitudes and practices,
which if unchallenged can perpetuate in organisations. Discrimination may also have
cultural roots that demand more specific individual approaches.

Strategies for Business

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From a business point of view discrimination does not make sense. It is an issue that
should be of concern to all businesses because discriminatory practices in employment
and occupation restrict the available pool of workers and skills, and slow economic
growth for society as a whole. The lack of a climate of tolerance results in missed
opportunities for development of skills and infrastructure to strengthen competitiveness
in the global economy. Finally, discrimination isolates an employer from the wider
community and can damage a company's reputation, potentially affecting profits and
stock value.
First and foremost, companies need to respect all relevant local and national laws
wherever they are operating. Any company introducing measures to promote equality
needs to be aware of the diversities of language, culture and family circumstance that
may exist in the workforce. Managers and supervisory staff, in particular, should seek
to develop an understanding of the different types of discrimination and how it can
affect the workforce. For example, women constitute a growing proportion of the world’s
workforce, but consistently earn less than their male counterparts.
Companies should develop and promote an equal opportunity policy that applies
qualification, skill and experience as the grounds for recruitment. Increasingly, young
graduates and new employees are judging companies on the basis of their social and
ethical policies at work. In addition, they must promote equality at work, which means
that all individuals are accorded equal opportunities to develop the knowledge, skills and
competence that are relevant to their job.

Actions
Companies can put in place specific activities to address the question of discrimination
and eliminate it within the workplace. Some examples are:
 institute company policies and procedures which make qualifications, skill and
experience the basis for the recruitment, placement, training and advancement of
staff at all levels
 assign responsibility for equal employment issues at a high level, issue clear
company-wide policy and procedures to guide equal employment practices, and
link advancement to desired performance in this area
 establish programs to promote access to skills development training and to particular
occupations
 work on a case by case basis to evaluate whether a distinction is an inherent
requirement of a job, and avoid systematic applications of job requirements in a
way that would systematically disadvantage certain groups
 keep up-to-date records on recruitment, training and promotion that provide a
transparent view of opportunities for employees and their progression within the
organisation
 where discrimination is identified, develop grievance procedures to address
complaints, handle appeals and provide recourse for employees
 be aware of formal structures and informal cultural issues that can prevent
employees from raising concerns and grievances.
Outside the workplace companies also have a role to play in eliminating discrimination,
for example by encouraging and supporting efforts in the community to build a climate of
tolerance and equal access to opportunities for occupational development. Two

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 TRAINING DEPT.

examples could be through adult education programs and the support of health and
childcare services.
In foreign operations, companies may need to accommodate cultural traditions and work
with representatives of workers and governmental authorities to ensure equal access to
employment by women and minorities.

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Company Example 10:

Deloitte Touche Tohmatsu (DTT)

DTT is one of the world’s leading professional services firms operating in over 130 countries
and employing over 92,000 people. The company provided a submission to the Global Compact
that focuses specifically on Principle 6.
DTT has a large and strong presence in South Africa where a history of apartheid has thwarted
the opportunity of black South Africans to succeed and develop economically. During the
1970s DTT recognised that there was a need to address imbalances in the workforce. Ad-hoc
initiatives throughout the 1970s were followed in 1991 by the establishment of a formal unit
focused on the recruitment of black trainee accountants – the MultiCultural Development Program
(MCDP).
The vision of the MCDP is the transformation of DTT’s South African practice into one that truly
represents the country in terms of race, gender and organisational culture. This aim moves
beyond the precepts of affirmative action brought through the political reforms of 1994. To achieve
these aims the company has developed a number of programmes:
 The Scholarship Programme – which awards scholarships from a fund to talented black
people who have met academic and additional criteria at schools and universities
 Diversity workshops – that facilitate dialogue among employees and allow participants to
reflect on their beliefs and values
 Partner development and reward system – which links the remuneration of partners in the
business to their contributions to the MCDP
 Bursaries – providing financial support to recruits requiring assistance – with 70% allocated
to black people
 School visits – to promote the profession to young black people
 Individual learning and development programme – a specialised plan is drawn up for each
individual to develop specific identified competencies
 Partner pairing – where each black professional employee is assigned a partner who acts
as a trusted mentor, providing support and development.
The MCDP is managed by a board of representative partners, who hold significant leadership
positions and are representative of staff. They determine strategy and policy, facilitate
implementation and monitor progress.
The company’s vision for transformation is founded on the beliefs of: outstanding value to clients,
commitment to each other, integrity, and strength from cultural diversity. The success of the MCDP
is considered to be determined by the extent to which employees embrace these beliefs.
Commitment to the aims of the MCDP is measured through feedback received at annual Diversity
Workshops and via the results of an annual Organisational Attitude Survey. In addition, a
consultation process is conducted with all employees as part of the requirements of the
Employment Equity Act process. With this recently introduced legislation, the Government aims
to ensure that equity is achieved in the workplace over a reasonable period of time.

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Company Example 11:

Nexen Inc.

As part of its commitment to maintain a working environment where all employees are treated
with respect and dignity, Nexen has implemented an “Integrity Program” to address questions of
equality, empowerment and accountability within the workforce. A cross-divisional team of
Integrity Program Leaders manages the educational aspect of the program and plays a
consultative role in dealing with ethical concerns. An Integrity Team has created tools for
increasing awareness, including a decision-making model, a body of case studies and “QUEST
- The Integrity Workshop”. All employees - from the executive boardroom to the plant floor - are
expected to participate in the Workshop and to discuss integrity in performance
communications. The material delivered in the Workshop is the same for all audiences with the
exception of the case studies, which vary from group to group to ensure relevancy and
inclusiveness.
The QUEST Workshop serves as a catalyst to engage employees and further provoke them to
take responsibility for integrity at work. QUEST is an acronym for Nexen's five pillars of
integrity:
Q – Query  What does integrity mean?
U - Unlock Ideas  Nexen's values, principles and expectations
E - Explore Options  Dealing with dilemmas/getting assistance
S - Select a Path  Case studies which explore integrity issues
T - Take Responsible Action  Risks, rationalisations and rewards of acting/not acting
with integrity
During 2001 the workshop was delivered to over 2,100 employees and contractors worldwide.
In countries where the working language was other than English, the workshop materials and
video were translated. Participant evaluations have been consistently positive.
In its submission to the Global Compact Nexen points to another long-term project involving
access to training. It relates to a program that has been carried out in partnership with
government and community stakeholders and is linked to Nexen’s operations in Yemen. The
programme consists of a three-year English language and technical course that qualifies people
for employment in a number of fields. As a result of this training, since 1993 the number of
Yemeni nationals employed by Nexen in Yemen has increased by about 9% per year. The
programme is therefore an effective means to support the local workforce while reducing the
need and cost associated with an expatriate workforce. Currently, 65% of Nexen's employees
in Yemen are nationals, with a target of 80% by 2009.
A Scholarship Program is also offered to qualifying Yemeni students enabling them to receive
post-secondary education in Canada. Candidates are selected based on their ability to
succeed and a commitment to bring their knowledge back to Yemen. The selection process is
based primarily on objective criteria ensuring that the most capable students are awarded
scholarships. However, during the course of implementing the Scholarship Program, it became
clear that talented graduates from rural areas in Yemen were not being considered due to
limited English skills. Nexen therefore established a pilot project to award in-country English
language scholarships to the top scoring candidates in these areas. In 2001, ten students
completed the nine-month English Language program with excellent results.

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5.5 Discussion Themes

1. A company has chosen to address the issues of freedom of association andcollective

bargaining consistent with principles of the Global Compact. Consider which key
stakeholders the company might usefully engage to help in this process.
2. Discuss and reflect on the challenges faced by companies developing labour policies
in restrictive regimes. With reference to your own business/industry explore the
range of organisations and initiatives that might provide support and assistance in
this area.
3. With reference to the company Example 5: The company describes a range of
activities derived from their agreement with the ICEM. What steps might thecompany
take to monitor and report any progress it makes?
4. Forced labour may not be easily identifiable by companies. How could a company
find out if forced labour might be an issue for the organisation? Consider the
relevance of partnership working in your discussions.
5. Consider which other labour issues (for example, child labour) may accompany the
discovery of forced labour. How might a company proceed if it finds itself in this
position? Reflect on the potential disclosure and accountability issues raised by
discovery of forced labour.
6. With reference to the company Example 6: Consider the actions taken by the
company.
 Is this an appropriate response?
 What might the alternatives be?
7. Detection and assessment of child labour is a key challenge. What resources or
partnerships might a company draw on to determine whether child labour is a
problem in their business?
8. The removal of children from the workplace can have unforeseen negative
consequences.
 What might the issues be?
 What are the options for a company seeking to uphold anti-labour
practices without endangering family livelihoods?

9. A number of codes and labelling schemes (for example, the Ethical Trade Initiative
(ETI) and the Clean Clothes Campaign) include child labour.
 Discuss the relative merits of involvement in these schemes.
 How might the experiences of company involvement with ‘labour
specific’ initiatives contribute to and support company activities on the
Global Compact?
10. With reference to the company Example 7: This company example is focused on
child labour. How might the issues outlined in this case intersect with the other
principles of the Global Compact?
11. Review the different grounds for discrimination. How complete is this list? What new
or emerging issues are faced by business?

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12. Few businesses can claim to have a truly diverse workforce. What are the
business benefits of diversity?
13. Have you experienced discrimination in the workplace? Reflect on the approaches
taken in the company examples. How does this relate to your experiences?
14. With reference to the company Example 10: Discuss the approach taken by DTT.
 To what extent are these programmes transferable?
 How might they operate in your business?

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6. An Introduction to the Environmental Principles

Topics –
 the Brundtland Report, the Rio Declaration and Agenda 21
 the precautionary approach as enshrined in the Rio Declaration
 the key concepts that underlie and support precaution
 approaches that business may take to apply the concept of
precaution
 the Agenda 21 definition of environmental responsibility
 examples of what responsible practice might mean for business
 what is meant by environmentally sound technologies
 the rationale for the development and diffusion of environmentally
sound technologies (ESTs)
 possible methods that companies can employ for promoting the
use and diffusion of ESTs

In the same way that the Universal Declaration of Human Rights and the Declaration
on Fundamental Principles and Rights at Work, underpin respectively the Human Rights
and Labour Rights Principles of the Global Compact, the Rio Declaration on Environment
and Development provides the basis for the Environment Principles.
Whereas the Universal Declaration of Human Rights was the first internationally- agreed
document to address the question of human rights, this is not the case for the Rio
Declaration and it is worthwhile to briefly trace back its history.
In 1972 the United Nations organised in Stockholm the first international conference on
the human environment. Principle 1 of the resulting Stockholm Declaration [see Box
below] introduces concepts that bear an obvious relationship with human rights, both civil
and political (freedom, equality, dignity) as well as economic, social and cultural rights
(adequate conditions of life and well-being). The Stockholm Conference led many
industrialised countries to create their own
national agencies to address the question of
environmental protection, but even more Principle 1 of the Stockholm
importantly resulted, in December 1972, in the Declaration states that:
decision by the UN General Assembly to create Man has the fundamental right to
the United Nations Environment Programme freedom, equality, and adequate
(UNEP). conditions of life, in an environment of
a quality that permits a life of dignityand
During the nearly 30 years of its existence UNEP well-being, and he bears a solemn
has worked to co-ordinate at the international level responsibility to protect and improve the
environment for present and future
activities relating to the environment. It has been generations.
responsible for creating much of the international
environmental law that is in use today, including [UN Conference on the
Human Environment, 1972]
the large number of Multilateral Environmental
Agreements (MEA’s) that address

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issues such as the loss of bio-diversity, climate change or desertification to name but a
few.
In 1983 the General Assembly established the World Commission on Environment and
Development (WCED) to formulate a global action plan to propose long-term
environmental strategies and new ways to try to reconcile the objectives of
development and the protection of resources. In the final chapter of its report “Our
Common Future”, released in 1987, the WCED (or Brundtland Commission) called for
an international conference to be convened that would review the progress that had
been made and create a follow-up structure. This conference, the United Nations
Conference on Environment and Development (UNCED) was held in June 1992 in Rio
de Janeiro. The follow-up structure is the Commission on Sustainable Development
(CSD), which was created after the conference to enhance international co-operation
and support the development of the work agreed at UNCED.
The Rio Declaration on Environment and Development is the statement of principles that
came out of UNCED. Its 27 principles define the rights of people to development but on
the other hand, their responsibilities to protect the common environment. The idea
behind the Rio Declaration is that, in order to have long-term economic progress, it has
to be linked to environmental protection to create a sustainable form of development.
And this requires a new and equitable global partnership involvinggovernments, people
and key sectors of society.
In addition to the Rio Declaration, the governments attending UNCED also agreed an
international action plan – Agenda 21. Agenda 21 is a blueprint on how to move towards
a sustainable form of development – one that balances the social, economical and
environmental factors.
These two key documents – the Rio Declaration and Agenda 21 – provide the basis for
much of the effort of the past ten years that has focussed on addressing the significant
environmental degradation and damage to the planet’s life support systems, which has
resulted from human activities. The three environmental principles of the Global
Compact, therefore, while being important for the business sector actually fall within a
much wider framework of environmental action being undertaken by other key
stakeholders.

Agenda 21 lays a solid foundation for the promotion of sustainable development in terms of social,
economic and environmental progress. Its recommendations are divided into four main areas:
 Social and economic issues such as international co-operation to accelerate sustainable
development, combating poverty, changing consumption patterns, demographic dynamics and
sustainability, and protecting and promoting human health.
 Conservation and management of resources for development, such as protection of the
atmosphere, combating deforestation, combating desertification and drought, promoting sustainable
agriculture and rural development, conservation of biological diversity, protection of freshwater
resources and the oceans, and the sound management of toxic chemicals and hazardous wastes.
 Strengthening the role of major groups, including women, children and youth, indigenous people
and their communities, NGOs, local authorities’ initiatives in support of Agenda 21, workers and their
trade unions, business and industry, the scientific & technological community, and farmers.
 Means of implementation, including financial resources and mechanisms, transfer of
environmentally sound technology, promoting education, public awareness and training,
international institutional arrangements, international legal instruments and mechanisms, and
information for decision-making.
[GEO-3, 2002]

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6.1 Environment: Principle 7

Businesses should support a precautionary approach to

environmental challenges.

What Is a Precautionary Approach?

The Rio Declaration firmly established the link between environmental issues and
development by stating that:
“ … in order to achieve sustainable development, environmental protection shall
constitute an integral part of the development process and cannot be considered in
isolation from it.”
However, as part of this human development process, human activities today are
transforming materials and energy into products and services at such a scale that
significant environmental change is occurring. And this is occurring with respect to both
the physical landscape as well as the critical biogeochemical cycles of the planet. A
critical question is how much human-induced change the natural environment can
absorb.
Despite an enormous amount of scientific activity over many years, knowledge of
environmental systems is still not sufficient to predict with any certainty the effect of many
human activities on the environment. One can point to the current scientific debate
concerning the effect of burning fossil fuels on the global climate as an illustration of the
dilemma. The use of chlorofluorocarbons, or CFC’s, provides another example of how
the hazardous nature of an activity can go unrecognised for many years. CFC’s were
introduced in the 1940’s but it was not until the 1970’s that Molina and Rowland predicted
that emissions of CFC’s persisting in the atmosphere could lead to ozone depletion in
the stratosphere. The first observation of ozone-depletion over the Antarctic was
reported in 1985 and the Montreal Protocol was signed in 1987. This environmental
treaty brought about a phasing-out of the use of CFC’s – nearly 50 years after their
introduction!
Therefore, if environmental protection is to be considered as an integral part of the
development process, how can the environmental risks associated with human activities
be assessed?
The Rio Declaration sets out an extremely important idea, now widely accepted by policy
makers, of a precautionary approach to environmental protection –
“In order to protect the environment, the precautionary approach shall be widely applied
by States according to their capabilities. Where there are threats of serious or irreversible
damage, lack of full scientific certainty shall not be used as a reason for postponing cost-
effective measures to prevent environmental degradation.”
The concept is not new having emerged in association with Clean Air legislation in the
Federal Republic of Germany in the 1970s. It has become an accepted principle in the
European Union and a part of international environmental law. The German concept of
‘vorsorgprinzip’ embraces notions of risk prevention, cost effectiveness, ethical
responsibilities towards the environment, and the (sometimes) uncertain nature ofhuman
knowledge and understanding.

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Precaution is founded on a number of key concepts, such as –

Preventative anticipation – taking action if necessary before scientific proof is available
on the grounds that a delay in the action will cause damage to nature and society.
Safeguarding ecological ‘space’ – not impinging on ecological margins so that we protect
and widen the assimilative capacity of the natural environment. This means refraining
from undesirable resource use.
Proportionality of response – to show that selected degrees of restraint are not unduly
costly. In other words, allowing for the possibly greater dangers for future generation if
important life support systems are undermined.
Duty of care – placing the onus of proof on those undertaking an activity or carrying out
change to demonstrate no environmental harm.
Promoting intrinsic natural rights – allowing natural processes to function such that they
maintain essential support for all life on earth.
Paying for ecological debt – or compensating for past errors of judgement as indicated
by the notion of ‘common but differentiated responsibility’ enshrined in the UN
Framework Convention on Climate Change.
It is important here to point out the existence of two concepts – the “precautionary
approach”, as embodied in Principle 15 of the Rio Declaration, and the “precautionary
principle”. A discussion of the precautionary principle is presented in the box below.

The Precautionary Principle.

“The precautionary principle is essentially a ‘better safe than sorry’ principle
which attempts to shift the burden of proof in disputes about environmental
damage.
Historically, the tendency has been to assume that industrial emissions are
‘innocent until proven guilty’ of environmental damage. The precautionary
principle suggests that certain kinds of emissions should be regarded as ‘guilty
by virtue of their nature’. And attempts should be made to reduce such
emissions, even in the absence of proof that they have caused particular
environmental effects.
After all, it is too late to worry about proof of a causal link after irreversible
environmental damage has taken place.”
[T. Jackson, 1996]

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A Business Approach to the Concept of Precaution

The key element of a precautionary approach, from a business perspective, is the idea
of prevention rather than cure. In other words, it is more cost-effective to take early action
to ensure that irreversible environmental damage does not occur. Companies should
consider the following:
1. While it is true that preventing environmental damage entails both opportunity –
and implementation – costs, remediating environmental harm after it has occurred
can cost much more, e.g. for treatment costs, or in terms of company image.
2. Investing in production methods that are not sustainable, i.e. that deplete resources
and degrade the environment, has a lower, long-term return than investing in
sustainable operations. In turn, improving environmental performance means less
financial risk, an important consideration for insurers.
3. Research and development related to more environmentally friendly products can
have significant long-term benefits.
Nevertheless, interpretation of the precautionary approach can present difficulties for
companies. They will be more effectively placed to assess any potential environmental
harm if they have a thorough understanding of current environmental impacts, as well as
the baseline environmental conditions, within their sphere of influence. This requires
developing a life-cycle approach to business activities that can:
 manage the uncertainty, and
 ensure transparency.
With respect to assessing the uncertainty, a number of useful tools are available to gather
information on the potential issues and impacts associated with technological, process,
planning and managerial changes, such as –
 environmental risk assessment – establishes the potential for unintended
environmental damage alongside other risks
 life cycle assessment (LCA) – explores the opportunities for more environmentally
benign inputs and outputs in product and process development
 environmental impact assessment – ensures that impacts of development projects
are within acceptable levels
 strategic environmental assessment - ensures that impacts of policies and plans
are taken into account and mitigated.
These tools provide the data that organisations need when deciding what actions to take.
When precaution is a fundamental, strategic issue for business, a range of actions is
possible –
 build-in safety margins when setting standards in areas where significant
uncertainty still exists
 ban or restrict an activity whose impact on the environment is uncertain
 promote best available technology
 implement cleaner production and industrial ecology approaches
 communicate with stakeholders.

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Company Example 12:

British Telecom

The principal activities of British Telecom (BT) are in telecommunications services, internet
services and IT solutions. BT submitted a case study to the Global Compact during the Pilot
Phase in 2001. Their submission covers all of the principles and illustrates how work at both
project and strategy level can be cross-cutting. With respect to Principle 7 the company highlights
its work on the siting of masts, or base stations, that are required for mobile telephone
communications.
BT insists that a balance must be struck between providing the infrastructure that is needed to
support communication services, and the concerns of the public about the possible health impacts
of base stations. An independent report (the Stewart Report) on this question was published in
2001 and concluded that the balance of evidence pointed to exposure to radio frequency levels
below National Radiological Protection Board guidelines as not causing adverse effects to the
general population. BT suggests that the evidence is not conclusive –the fact that no adverse
effects have as yet been detected does not mean that there are no effects – and that decisions
on the siting of masts need to be informed by additional factors. In particular the company believes
that judgements regarding safety are best made by independent experts, and that as such the
company will adopt a precautionary approach to the siting of masts that complies with the spirit
of the report’s recommendations.
In accordance with this approach BT has taken the following actions –
 the company’s Chief Medical Officer overseas policy, practice and communications inrelation
to the siting of masts,
 all existing sites have been audited for compliance with the Stewart Report guidelines and
have been found to be well within recommended levels,
 BT is supporting financially UK and European research on this issue - as set by the World
Health Organisation,
 the company shares masts or uses existing sites to avoid a proliferation of ground base
stations,
 the company is working on less obtrusive masts and exploring alternative siting such as on
existing street furniture,
 BT employs community liaison officers to undertake informed dialogues with community
leaders and representatives on the need for, and the best options for the siting of base
stations, and
 the company is working with planning authorities to avoid siting near schools for example.

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Company Example 13:

Shell International Ltd. [www.shell.com]

The example submitted by Shell to the Global Compact in 2002 focuses on the precautionary
nature of its approach to biodiversity in the context of new projects. Shell has identified biodiversity
as being a key driver in its decision-making process regarding new projects and investments. As
the search for new oil and gas reserves expands into even more sensitive environments, Shell
has recognised that its activities have the potential to impact biodiversity adversely and believes
that, by operating responsibly with respect to biodiversity, it can ensure that the integrity of an
area is maintained and also avoid damage to its reputation.
Shell’s activities began with a workshop involving key international conservation organisations at
which three key areas for the company were identified –
 Communication of a consistent position on biodiversity for the complete Royal/Dutch Shell
group of companies,
 To “operate responsibly”, and
 To work with others to make a positive contribution to global biodiversity.
Shell's actions in these three areas are summarised below:
1. Shell has published a formal Group-wide biodiversity standard and has appointed a Group
Biodiversity Adviser to translate the standard into guidance for Shell operations.
2. Shell responded to the call for “operating responsibly” by developing a GIS “Early Warning
System” to provide biodiversity information for use in consultations with stakeholders onnew
business activities in sensitive environments. Data on protected areas – such as World
Heritage Sites, UN-listed areas (IUCN Categories I-VI) and Ramsar sites – as well assensitive
environments – such as the WWF Global 200 Eco-regions, and Conservation International's
“hot spots” – are included in the system. Potential impacts on biodiversity are also being
integrated into Shell’s Environmental and Social Impact Assessments (ESIAs), which are
carried out prior to new projects or important modifications. Shell is working with the World
Conservation Monitoring Centre (UNEP-WCMC) to make this information available within the
public domain.
3. Shell has established a number of relationships that are aimed at building trust so as to
resolve operational issues as well as to make a positive contribution to conservation. The
Camisea Project and the Energy and Biodiversity Initiative (EBI) demonstrate how business
and NGOs can work together effectively –
Shell Prospecting and Development - Peru (SPDP) performed an appraisal and exploration
operation in the Camisea region, an extremely sensitive area adjacent to the Manu National
Park in Peru. Shell carried out extensive consultation with local and international NGOs
and the indigenous Machigenga people, and ran the appraisal campaign with restricted
access for visitors – no roads were built and barges, hovercraft and helicopters were used for
operations. SPDP worked together with the Smithsonian Institution to conduct biodiversity
assessments and the information was used in the business decision-making process for the
location of a gas process plant and the routes of pipelines. Following the Camisea Project,
the Shell Foundation funded the Smithsonian Institution to carry out a 5 year study on the
impacts of oil and gas operations in sensitive environments.
Finally, the Shell Foundation contributes to the Energy and Biodiversity Initiative (EBI) along
with three other companies (BP, ChevronTexaco, and Statoil) and five conservation NGOs
(Conservation International, Fauna and Flora International, IUCN, the Smithsonian Institution
and The Nature Conservancy). The EBI is looking to integrate biodiversity into business
decision-making by developing a business case for biodiversity, establishing biodiversity
conservation practices and metrics, and designing a decision-making framework to guide
the site-selection process.

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6.2 Environment: Principle 8

Businesses should undertake initiatives to promote

greater environmental responsibility.

The Background to Principle 8

The Rio Earth Summit in 1992 acted as a ‘wake-up call’ for many parts of society, not
least of which the business sector. For the first time a comprehensive group of
stakeholders gathered together to discuss the issues raised by the patterns of
industrialisation, population growth and social inequality around the world. The
conference highlighted the true fragility of the planet and in particular it drew attention
to three concerns:
 the damage occurring to many natural ecosystems,
 the threatened capacity of the planet to support life in the future, and
 our ability to sustain long term economic and social development.
The message to companies was spelt out in Chapter 30 of Agenda 21, in which the role
of business and industry in the sustainable development agenda is discussed.And
an outline of what environmental responsibility means for business is presented –
“[the] responsible and ethical management of products and processes from the point of
view of health, safety and environmental aspects. Towards this end, business and
industry should increase self-regulation, guided by appropriate codes, charters and
initiatives integrated into all elements of business planning and decision-making, and
fostering openness and dialogue with employees and the public.” (30.26)
In the ten years since “Rio”, the imperative for business to conduct its activities in an
environmentally responsible manner has not lessened. On the contrary, as recent
analyses of the “state of the planet”
indicate, despite progress in some "Environmental threats resulting from the accelerating
areas (e.g. ozone-depletion, air- trends of urbanization and the development of
pollution in many developed regions, megacities, the tremendous risk of climate change,
the freshwater crisis and its consequences for food
or advances towards reducing security and the environment, the unsustainable
greenhouse gases under the Kyoto exploitation and depletion of biological resources,
Protocol) the overall trends are drought and desertification, and uncontrolled
negative and much work still remains deforestation, increasing environmental emergencies,
the risk to human health and the environment from
to be done. Scientists and experts are hazardous chemicals, and land- based sources of
reporting disturbing global trends pollution, are all issues that need tobe addressed. "
concerning not only vital aspects of
(Malmö Ministerial Declaration, 31 May 2000)
our life support system, but also the
foundation of our social development
system.
Given the increasingly central role of the private sector in global governance issues,
the public is demanding that business manage its operations in a manner that not only
enhances economic prosperity and promotes social justice, but also ensures
environmental protection in the regions and countries where it is based. Through

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Principle 8, the Global Compact provides a framework for business to take forward some
of the key challenges made 10 years ago.

Towards Environmentally Responsible Business Practice

Business gains its legitimacy through meeting the needs of society, and increasingly
society is expressing a clear need for more environmentally sustainable practices. One
way for business to demonstrate its commitment to greater environmental responsibility
is by changing its modus operandi from the so-called “traditional methods” to more
responsible approaches to addressing environmental issues –

inefficient resource use  resource productivity

end-of-pipe technology  cleaner production
public relations  corporate governance
reactive  proactive
management systems  life-cycles, business design
one way, passive multi-stakeholder, active

communication dialogue

Such a change in business strategy brings with it a number of benefits. UNEP-DTIE has
pinpointed the following reasons why a company should think about improving its
environmental performance –

 Application of cleaner production and eco-efficiency leads to improved

resource productivity
 New economic instruments (taxes, charges, trade permits) are
rewarding clean companies
 Environmental regulations are becoming tougher
 Insurance companies prefer to cover a cleaner, lower risk company
 Banks are more willing to lend to a company whose operations will not
burden the bank with environmental lawsuits or large clean-up bills
 Environmental stewardship has a positive effect on a company's image
 Employees tend to prefer to work for an environmentally responsible
company (such a company also often has good worker health and
safety records)
 Environmental pollution threatens human health
 Customers are demanding cleaner products

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TRAINING DEPT.

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UNEP International Declaration on Cleaner Production

Cleaner Production is a strategy to address environmental degradation resulting from the
continual expansion of industrial production and high-levels of consumption worldwide. It is a
preventative environmental management strategy that promotes eliminating waste before it is
created to systematically reduce the generation of pollution overall and improve efficiencies
of resource use.
When Cleaner Production was first introduced by UNEP in 1989 the immediate objective was
to raise awareness about the Cleaner Production concept and to promote its adoption by
industry. Since that time, it has become widely recognised as a successful strategy to
improve industrial performance and simultaneously protect the environment.
With the International Declaration on Cleaner Production UNEP has introduced a voluntary
but public statement of commitment to the practice and promotion of Cleaner Production.
The Declaration is essentially an outline of what signatories can say and what they can do to
further the global implementation of Cleaner Production. It provides an opportunity for high-
level political, public and private business leaders worldwide to commit to reinforce the
general recognition and endorsement for a more intense and broader adoption of Cleaner
Production. It is a tool for all promoters of the Cleaner Production strategy to spread an
understanding of the strategy and attract new advocates from government, business and
other sectors.

However, once a company has decided to adopt a more environmentally responsible

corporate policy, what initiatives does it need to undertake? 7 key elements that
contribute to environmental responsibility are shown below –
 apply a precautionary approach,
 adopt the same operating standards regardless of location,
 ensure supply-chain management,
 facilitate technology transfer,
 contribute to environmental awareness in company locations,
 communicate with the local community, and
 share benefits equitably.
And in order to turn these concepts into concrete, environmentally responsible actions,
a company can choose to –
 implement the International Declaration on Cleaner Production [see below],
 work with suppliers to improve environmental performance (supply chain
management),
 re-define company strategies and policies to include the 'triple bottom line'
of sustainable development – economic prosperity, environmental quality
and social equity,
 set quantifiable objectives and targets,
 develop sustainability indicators (economic, environmental, social),
 measure, track, and report progress in incorporating sustainability principles
into business practices, including reporting against global operating
standard,

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 adopt voluntary charters, codes of conduct, codes of practice in global and

sectoral initiatives, and
 ensure transparency and unbiased communication with stakeholders.

Company Example 14:

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Yawal System

Yawal System is a medium sized company in the south of Poland that produces architectural
aluminium constructions. The company is part of a holding company with production plants in
eastern and central Europe.
The company submitted a case study during the Pilot Phase of the Global Compact under
Principle 8 to illustrate the range of measures they are taking towards developingenvironmentally
responsible practices. Yawal indicates that environmental responsibility is neither profitable nor
easy in Poland under current circumstances, but that the company is driven by the
opportunities and requirements that it expects to result from greater European integration. Its
environmental strategy is being led by the shared beliefs of the management team and is
supported by an enthusiastic workforce who have ‘stressed the importance of working in a
company with a responsible corporate culture and appropriate management systems and audit
instruments.’
The company has established the issues of waste and energy consumption as its key targets and
has taken the following measures to develop environmentally responsible practices:
 reduced the use of plastics (for wrapping aluminium) by 20% since Oct 2000,
 decreased the use of paper by 30% since Oct 2000,
 substituted the use of wooden baskets for wrapping aluminium profiles with steel baskets,
which have a substantially longer life cycle,
 conducted training for workers in the identification and management of environmental risk,
 segregated all waste, and in particular hazardous waste, into separate streams,
 developed indicators describing which areas of production are exposed to a high risk of
environmental degradation, in association with a local non-governmental organisation and an
academic institution;
 consulted with local government about the scope and nature of the changes being made, and
 disseminated the information and experiences gained with other local companies.
The company is working towards a programme of continuous environmental improvement, and is
aiming to produce an environmental report by Oct 2002.
The company reports that the knowledge gained through its work to date has improved
management systems across the board. In addition, communications with foreign investors have
improved and local government representatives are beginning to recognise the importance of
this approach.

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Company Example 15:

BP

In its submission to the Pilot Phase of the Global Compact Learning Forum, BP described its
internal Greenhouse Gas (GHG) Emissions Trading System in the context of a key activity to
address Principle 8 on promoting greater environmental responsibility.
In 1998 BP announced that it would reduce its greenhouse gas (GHG) emissions to 10% below
1990 levels by 2010. Following the merger with Amoco and subsequent acquisitions, this target
was extended to the whole BP group and the company chose to use a company-wide emissions
trading system as the principal tool to deliver this target in a cost-effective way. BP isorganised
around approximately 160 Business Units (BU's) that operate in 100 countries, and each BU has
its own performance contract to deliver agreed objectives. This system is well adapted to the
implementation of an emissions-trading system since each BU participates in thetrading system
as a distinct entity.
The scheme was launched in January 2000 following one year of operating a pilot emissions
trading system that had been developed by BP and the US-based NGO, Environmental Defense,
and many of the lessons learned from the pilot scheme were incorporated into the design of the
company-wide system. Both carbon dioxide (CO2) and methane (CH4) are traded, with CH4 being
converted into “CO2 equivalent units”.
A Group Cap is set annually to steer BP towards its GHG target at 2010 and is expressed as a
percentage reduction from the Group 1998 emissions. 1998 was chosen as the base year as it
represented the most accurate set of data for the BP Group. The company-wide cap is used to
set the total number of “allowances” for each BU. Allowances [an allowance equates to one metric
tonne of CO2] are then traded amongst the BU’s with all activity being registered through a central
broker.
One example from the trading scheme serves to demonstrate how it works. A deepwater offshore
BU had plans to increase its production rate during year 2000, which would cause it to exceed its
annual emissions allocation. As the on-site cost of reducing these emissions was higher than the
market price of CO2, it made a decision to purchase allowances from achemicals BU that had
upgraded a furnace giving it spare allowances to sell.
Each BU is responsible for collecting and reporting its own emissions data as part of its normal
environmental performance reporting. Standard reporting protocols for CO2 and CH4 are used
and a data audit and verification system has been developed with a group of external partners. In
order to ensure compliance with the BP system, the GHG allocations are fixed in theperformance
contract of each Business Unit Leader and progress is reported in the financial performance
indicators for the company. The BU leaders are therefore accountable for meetingtheir targets on
an annual basis and their GHG performance rates equally with their financial performance.
The company reports that a number of lessons have been learned, amongst which –
 data quality is the key to a successful trading system; BU’s need to understand their past,
present and future emissions,
 understanding the costs of pollution abatement at the project level is vital,
 compliance with the trading system must be linked to managerial performance, and
 key stakeholders need to be engaged at the formative stages of the process.
The emissions trading system at BP has operated successfully for over a year and the company
is convinced that trading has considerable potential to reduce GHG emissions. It states that the
trading system has:
 raised awareness of the climate change issue both inside and outside the company,
 created innovative business strategies to find cost effective emissions controls; and
 enabled BP to quantify financially the GHG implications of its investment decisions.

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Company Example 16:

Nokia

This example, submitted by Nokia in 2002, describes a programme at Nokia to reduce waste
during the manufacturing stage of the product life cycle. The activities address Principles 7 and
8 of the Global Compact.
Nokia points out that the driving force for materials recycling is –
 the rise in the number of mobile phones being produced, which has put pressure both on
the cost of waste disposal and the space available to store waste,
 stakeholder expectation for better environmental management,
 anticipated changes in legislation on recycling, and
 an initiative of the employees.
The simple but effective solution that Nokia came up with was to place containers where the waste
originated, to instruct production staff on how to sort the waste, and to identify (or create) suppliers
and recycling companies that would collect the waste.
The basic process was as follows –
1. Nokia analysed the kind of waste that was being produced at each production site,
2. It discussed with its suppliers and manufacturing departments about the possibilities to
minimise waste or improve materials, and then evaluated different reuse / recycling solutions,
3. The company then evaluated any remaining potential for material recycling,
4. It set up the sorting bins, created sets of instructions and carried out training, and
5. Finally it followed up, for example by carrying out "purity checks" of the landfill fraction, to
make sure that nothing could still be "used".
Some of the results are that Nokia’s factories have been able to reduce appreciably the amount
of waste generated throughout the manufacturing process. For example, in the Salo mobile phone
factory in Finland, more than 80% of incoming materials now end up inside the telephones.
Through simple waste management measures, 16% of the remaining materials arereused or
recycled and landfill waste now represents only 0.2%. In China it was found thatmost of the
waste at Nokia’s Beijing factory was from packaging materials that came with the components.
The packaging material was largely recyclable and could be sent back to the suppliers for re-use.
Electronics components make up only a small part of the waste volume. However, they also have
a metal value when recycled.
Nokia mentions that the programme has tapped into the creativity of Nokia’s employees, as it has
required them to identify new uses for the separated waste streams. It also points out that, as a
result of ISO 14001 certification, the standardised environmental training in the Nokia factories
has facilitated the sharing of “best practices” between different business units and factories. Co-
operation with industry bodies, such as Finland's State Technology Research Centre and the
European Information and Communications Technology Association (EICTA) was also important.
They observe that the fact that both the company and society have benefited has made it easier
to encourage the development of the recycling programmes within Nokia’s factories around the
world.

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6.3 Environment: Principle 9

Businesses should encourage the development and

diffusion of environmentally friendly technologies.

What is meant by an ‘environmentally friendly technology’?

Encouraging the development and diffusion of environmentally friendly technology is a
longer-term challenge for a company that will draw on both the management and
research capabilities of the organisation. For the purposes of engaging with the Global
Compact, environmentally friendly technologies are considered to be those that are
described in Chapter 34 of Agenda 21 as being “environmentally sound”. Agenda 21
outlines environmentally sound technologies (ESTs) as those which –
“…protect the environment, are less polluting, use all resources in a more sustainable
manner, recycle more of their wastes and products, and handle residual wastes in a
more acceptable manner than the technologies for which they were substitutes. [ESTs]
are not just individual technologies, but total systems which include know-how,
procedures, goods and services, and equipment as well as organisational and
managerial processes.”
Important here is an understanding that this broad definition includes end-of-pipe and
monitoring techniques but that explicitly encourages more progressive preventative
approaches, such as pollution prevention and cleaner production technologies. The
aspiration of this principle is, therefore, towards clean technology where the function is
to provide a human benefit or service, rather than concentrating on products per se.

Reasons to Develop and Diffuse (EST’s)

Environmentally proficient technologies allow us to reduce the use of finite resources and
to use existing resources more efficiently. For example, improvements in the power to
weight ratio of batteries has led to a significant reduction in the use of toxic heavy metals
whilst bringing substantial benefits to the consumer.
Waste storage, treatment and disposal is costly both in financial as well as in
environmental and social terms. Since environmentally sound technologies generate
less waste and residues, the continued use of inefficient technologies can represent
increased operating costs for business. In addition it also results in a retrospective focus
on control and remediation rather than prevention. In contrast avoiding environmental
impacts through pollution prevention and ecological product design increases the
efficiency and overall competitiveness of the company and also may lead to new business
opportunities.
As environmentally sound technologies reduce operating inefficiencies, they also lead to
lower emissions of environmental contaminants. This benefits in the first case workers
who are exposed to much lower levels of hazardous materials on a daily basis and also
results in a substantially reduced risk of accidents or technological disasters.

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Methods to Promote the Use and Diffusion of ESTs

Engagement with Principle 9 will depend to some extent on the size and nature of the
business. However all companies will want to pursue the business benefits that come
from a more efficient use of resources. As this principle captures both ‘hard’ technologies
and ‘soft’ systems the potential entry points are broad.
At a basic factory site or unit level, improving technology may be achieved by four
principle means:2
1. Changing the process or manufacturing technique – from simple modifications to
more advanced changes that require research and development.
2. Changing input materials – in order to use raw materials that are less toxic, for
example.
3. Changes to the product – for example by switching from solvent- to water-based
paints.
4. Reusing materials on site – separating, treating and recovering useful materials from
waste, so-called “by-product synergies”.

Strategic level approaches to improving technology include:

 Establishing a corporate or individual company policy on the use of EST’s.
 Making information available to stakeholders that illustrates the environmental
performance and benefits of using EST’s.
 Refocusing research and development towards ‘design for sustainability’.
 Use of life cycle assessment (LCA) in the development of new technologies and
products, so as to take into account impacts in manufacture, use and at the end of
life of the product.
 Employing Environmental Technology Assessment (EnTA) - an analytical tool
designed to ensure that decision making processes related to technology adaptation,
implementation and use are sustainable.
 Examining investment criteria and the sourcing policy for suppliers and contractors
to ensure that tenders stipulate minimum environmental criteria.
 Co-operating with industry partners to ensure that ‘best available technology’ is
available to other organisations.

2
For further details see DeSimone, L., D. and Popoff, F. with the World Business Council for Sustainable
Development. (1997). Eco-Efficiency: The Business Link to Sustainable Development. MIT Press: London.

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An example of how environmentally friendly technologies are being promoted comes

from the area of climate change and the work of the IPCC (Intergovernmental Panel on
Climate Change)3. Here the goal is to encourage the use of technologies that result in
lower emissions of greenhouse gases (GHG’s), and in particular of carbon dioxide
CO2. In its Inventory of Technologies, Methods and Practices for Reducing Emissions
of Greenhouse Gases the IPCC has focussed on the energy sector. As a first step it has
defined the Energy Cycle starting with the primary fuel resources and going right through
the lifecycle until delivery of the energy service to the customer. This is shown in the
diagram below for the generalised or reference energy cycle. It has then identified the
environmental aspects that are sources of GHG’s for each part of the cycle. Finally, it
has addressed the technologies that are involved with each step in the process and
provided an inventory of the technologies at the present that respond best to the objective
to reduce GHG emissions.

3
Inventory of Technologies, Methods and Practices for Reducing Emissions of Greenhouse Gases, IPCC
– Working Group II, 1996.

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Company Example 17:

STMicroelectronics

STMicroelectronics (ST) has provided the following as an example of an activity that specifically
addresses the question of encouraging the use of environmentally friendly technologies (Global
Compact Principle 9).
Environmental protection is a key element within ST’s corporate culture and a part of its Total
Quality Environmental Management (TQEM) approach. The company also believes that there
is a good economic reason for it to use environmentally-sound technologies and processes as
these technologies consume less energy and natural resources. It is equally convinced that, as
a leader on environmental issues, it is better placed to attract the best human resources that it
needs to maintain its economic performance.
An example of a “best practice” approach to reduce energy consumption, which has been applied
by ST, is that of a "free cooling" system. Free cooling is possible if a plant incorporates a heat
exchanger to provide “chilled water”, and it can be used to save energy whenever the outside
wet-bulb temperature drops below the required chilled water set point. The low temperature of
the cooling-tower water supply enables free cooling of research laboratories, production areas,
computer rooms and office buildings since it allows the chiller's compressors to be shut down.
The parameter that must be checked to determine the feasibility of such a system is the number
of hours per year where the external wet-bulb temperature is below a certain critical value.
ST’s Agrate Site in northern Italy has many years of experience in the design and management
of free-cooling plants and all of the chillers today are provided with such a system. In the wafer
fabrication at this site, use of the free cooling system allows the chillers to be turned off during
100 days each year. ST has calculated that this corresponds to an energy saving of about 10GWh
per year, with the associated economic saving, and allows the site to reduce by 5400 tons its
annual CO2 emissions.

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Company Example 18:

BASF [www.basf.com]

BASF’s support for the environmental Principle 9 is illustrated by their work on eco-efficiency
analysis and, in particular, the company’s efforts to promote this approach to other businesses
world-wide.

BASF was one of the first chemical companies to develop eco-efficiency analysis for its products
and processes. In the first stage of the analysis one assesses the environmental impact – taking
into account factors such as raw material and energy consumption, air and water emissions,
disposal methods, potential toxicity and further risks. The second step then involves compiling
economic data by calculating all the various costs involved in manufacturing and/ or using the
product.
Both data sets are then plotted on a graph, as shown above, to obtain the eco-efficiency of a
product or process. By carrying out the eco-efficiency analysis for comparable alternative
products or processes [those of BASF as well as of its competitors], BASF is able to detect and
exploit potential environmental and economic improvements that can guide long-term strategic
decisions. To date BASF has analysed around 120 of its products and production processes. The
analysis can be used to assess the complete lifecycle of a product by taking into consideration
the environmental impact of the product and its manufacturing processes, consumer behaviour
and recycling and disposal possibilities.
BASF believes that its eco-efficiency analysis contributes to putting the environmental principles
of the Global Compact into practice. In particular it provides a tool to assess the environmental
soundness of different technologies. In a bid to diffuse this knowledge, BASF has taken steps to
make its eco-efficiency analysis available to other companies and organisations, in particular
those from developing countries. The company has organised symposiums for business and civil
society organisations to discuss the potential of the tool and plans to organise training workshops
to highlight the benefits of eco-efficiency analysis within the framework of the Global Compact. In
addition BASF is developing a manual that explains how to use the tool and illustrates lessons
that the company has learned in the course of applying it to their own business.

6.4 Discussion Themes

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1. The precautionary approach places the burden of proof on a company to

demonstrate that its activity or technology is not harmful to the environment. Consider
this statement and debate the implication for your company/ industry.How might
the precautionary approach be applied to a new warehouse development on a
brownfield site?
2. The quotation below comes from the International Organisation of Employers’ Guide
to the Global Compact, and explains Principle 7 to employers. With reference to the
Rio Declaration, discuss this interpretation of the precautionary principle.
“A company should not be required to do what is, in practical terms, the impossible,
namely to prove that a certain product or process will have no negative environment
impacts. Rather, basing its evaluation on sound science and risk assessment, in the
absence of scientific evidence that a given product or process may be dangerous, a
company should feel free to use it, consistent with national laws and regulations.”
3. With reference to the company Example 12: The company describes an approach
that links with the UK planning framework. Consider and discuss the opportunities
for existing or emerging statutory frameworks (in your industry and country of
operation) to support or hinder a precautionary approach.
4. With reference to the company Example 12: The company describes a range of
actions to mitigate the possible impacts of radio frequencies from masts.
 Who are the primary stakeholders in this situation?
 What additional measures could the company take to address their
possible concerns?
5. Environmental responsibility has been closely linked to efficiency and quality
improvements. What are the potential benefits of environmentally responsible
practice?
6. With reference to the company Example 14: The work described by the company is
focused on the environmental principles of the Global Compact. How might this
company use the systems and approaches it has developed so far to engage with
other aspects of the Global Compact?
7. With reference to the company Example 14: Based on the company’s current focus
on waste and energy management, consider the type of indicators best suited to
communicate performance improvement.
8. With reference to the company Example 15: The company reports that the
development of this scheme has done much to raise the profile of environmentally
responsible practice within the company. With reference to your own experiences,
(and the material covered in this topic) consider the possible mechanisms forraising
awareness of environmentally responsible practice in your business/ industry.
9. With reference to the company Examples 14 and 15: Both companies illustrate that
the development of their environmental strategies has involved collaboration with
non-governmental organisations. Consider the advantages and the possible
difficulties of this approach.
10. The diffusion of environmentally sound technologies relies on good communication
and information being available to key stakeholders. Reflect on the challenges of this
requirement for your own business or industry.

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11. What are the key messages?

12. How might they be most effectively delivered?
13. Conduct a hypothetical risk assessment of your current business or industry.
Consider and discuss how cleaner production and improved technologies (hard and
soft issues) might reduce any risks you have identified.
14. With reference to the company Example 17: The company describes the
development of a new and relatively unproven technology. Discuss the challenges
inherent in diffusing innovative, leading technologies.
15. With reference to the company Example 18: With reference to your own experiences,
business/ industry, discuss the advantages and disadvantages of the eco-efficiency
analysis tool.

7. Addressing the Global Compact’s Nine Principles

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